The rupee ended the session at a record low of 71.57, down 0.50 per cent from Monday’s close of 71.21 a dollar.

“Given the inefficacy of sterilised intervention, we believe RBI may be thus following a relatively hands off policy in forex market for now and hence the recent penchant for rupee to depreciate at a much faster rate,” SBI said in a research note.

Noting that it took only one trading day for the rupee to travel 100 paisa on August 13 as against a historical average of 17 days beginning April 2018 and 27 days in 2015, it said, “We should be utterly careful about any rapid depreciation and must be equally mindful of the quotes coming out from policy making authorities regarding the desirability of rupee depreciation”.

On Tuesday, the 10-year bond yields zoomed past 8 per cent level for the first time since 2015 suggesting that the cost of funds may go up in the coming days.

“There are talks of out-of-the-monetary-policy interest rate hike by the RBI and issuance of NRI bond issue to raise dollar money. However, at present possibility of both the options is very low as the macroeconomic situation is much better than it was in 2013,” said Rushabh Maru, research analyst at Anand Rathi Financial services.

According to him, reports about the rupee weakening further to 72-73 levels in the coming days have triggered speculative buying of dollar, which is putting further pressure on the local currency.

The markets too came under selling pressure with both Sensex and Nifty registering their fifth consecutive sessions of losses. The Sensex lost 154.60 points or 0.40 per cent to end the session at 38,157.92 while the Nifty ended the day at 11,520.30, down 62.05 points or 0.54 per cent.

According to the provisional data, FPIs were net buyers of equities worth Rs 32.64 crore.